03.11.08
Social Security
Yesterday I received a letter from the Social Security Administration about my estimated benefits that I will receive when or retire or if I become disabled. As an intelligent and thinking person, I of course know that I’ll see few benefits, if any. However, for those that didn’t already know, they spell it out in the fine print:
“Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. the law governing benefits may change because, by 2041, the payroll taxes collected will be enough to pay only about 75 percent of scheduled benefits.”
Translation: “nanner, nanner, we’ve got your money and can do whatever we want with it.”
This is a compelling argument for private accounts. For all the arguments *against* private accounts, they are all favorable compared to the current situation, in which you give your money to a “broker” (the US government in this case) who can change the contract terms anytime he wants (without your consent), and is not even obligated to return your money (or what’s left of it) when he’s finished with it. I believe I just paraphrased an argument I read in a column by Thomas Sowell some years ago.
And when I say “private accounts” I don’t necessarily mean an IRA or a truly private account. I’m perfectly happy to continue to have payroll taxes go into a government controlled account, as long as the contract terms are static (it is, after all, my money) and I *know* what I’ll receive when I retire. I do think folks should have some aspect of control over their accounts, whether it be full control (any combination of stocks or bonds you want) or a range of funds they can choose from to assume more or less risk in their portfolio.